Reforms surrounding the teacher's role in fostering students' social competences, especially those associated with empathy, have moved to the forefront of global higher education policy discourse. In this context, reform in higher education teaching has been focused on shifting teachers' practices away from traditional lecture-style teaching--historically associated with higher education teaching--towards student-centred pedagogical approaches, largely because of how the latter facilitate students' social learning, including the development of students' abilities connected to empathy, such as intercultural understanding. These developments towards learner-oriented higher education teaching may offer promising opportunities; however, a central problem within these current policy recommendations is that the connection between cultivating empathy and cultivating imagination is not explicitly foregrounded. Against this background, I turn to Dewey's notion of imagination to show how imagination is indispensable to all learning, and therefore has a role to play in teaching. In this article, I show how imagination is not only deeply connected to empathy, but also critical for gaining intercultural understanding and is a condition for the possibility that, as human beings, we can learn with and from others. On this basis, I argue that Dewey's notion of imagination provides significant insight on how to rethink what is needed to create inclusive classrooms in higher education, especially under conditions of cultural, linguistic and religious diversity. First, I consider Dewey's concept of learning and the indispensable role of imagination in learning. Second, drawing on the work of Martha Nussbaum, I examine how teaching through the narrative arts in higher education cultivates the imagination and helps us engage the lives of others. I use an example from my own teaching to illustrate how the narrative arts can foster dialogue across difference through the development of what I call "third voice"--a different or other "position" that productively mediates reflective interaction between participants, including teacher and learners. In closing, I consider the implications of my discussion for present and future higher education policy on the evaluation of "quality teaching".